Following the raising of fossil fuel prices today – for the fourth day in a row – the latest rates in Mumbai are Rs 97.61 a litre for petrol and Rs 88.82 a litre for diesel. This is the highest price petrol has scaled in the financial capital and is now just Rs 2.39 shy of the Rs 100-per-litre mark. The previous highest for petrol in Mumbai was Rs 97.57 a litre on February 28, 2021.
In a matter of four days – from May 4 to May 8 – the price of petrol has risen by 0.66 paise a litre (from Rs 96.95 to Rs 97.61). The hike for diesel is even more – 0.84 paise a litre (from Rs 87.98 to Rs 88.82).
Motorists in India had a welcome respite for hikes in already sky-high fossil fuel prices for around 65 days, after the last hike on February 28. On May 4, two days after the results of the elections in four States – West Bengal, Kerala, Assam and Tamil Nadu – and the Union territory of Pondicherry were declared, oil marketing companies began hiking prices of petrol and diesel, much to the chagrin of motorists and transporters.
In the past 13 months, since the start of FY2020, when BS VI kicked in, petrol and diesel prices have jumped massively. The price data table above reveals just how much more motorists in Mumbai, Delhi, Chennai and Kolkata are paying to travel the same distance.
The petrol-diesel price differential of Rs 10.09 on April 1, 2020, is today down to Rs 8.79 a litre, indicating the speedier price rise in diesel, which is the fuel used by scores of commercial vehicles crisscrossing the country and transporting essential goods and at present life-saving oxygen cylinders.
In 13-odd months, from April 1, 2020 when the BS VI emissions mandate kicked in, petrol price has risen by Rs 23.33 a litre and diesel by Rs 23.63 a litre.
Taxes make up for over 61% of retail petrol price and 56% of diesel. The retail price of the two fuels is made up of three components – base price that reflects the cost of international oil, central excise duty and state taxes. Both Central and State governments rely heavily on collections from taxes on these products for meeting their developmental and welfare priorities.
Global crude prices on the upswing
The rise of petrol and diesel prices is a direct impact of the marked increase in global crude oil prices, which in turn is a result of the key economies like the USA swinging back into work mode after the impact of the pandemic.
Given that Brent crude oil is trading today at US$ 68.96 a barrel, down from the $69.39 a barrel two days ago. However, with major global economies on the mend and having lifted lockdowns, oil prices are firming up. Today’s Brent crude oil price is a 275% increase over the $18.38 a barrel price on April 1, 2020 when Covid-19 was peaking and transport and shipping operations worldwide were either in lockdown mode or minimal. However, the hapless Indian motorist never benefited from the record low prices of global crude oil either. Now, in the heat of summer and a torrid May, he/she also feels the heat of paying more to tank up a vehicle on two, three or more wheels.